Property & Roads

The Payback of Deferred Taxes: Green Acres and Rural Preserve

A payback of deferred taxes is required on land currently enrolled in the Green Acres program if it is developed in a non-agricultural use; platted and not used agriculturally; sold, traded, gifted, or transferred to a new owner for a use other than for farming; sold, traded, gifted, or transferred to a new owner who does not satisfy the ownership requirements of the program, including the failure to submit the required application and supporting documents within 30 days of the sale closing; or becomes ineligible for the deferment because certain enrollment requirements of the program are not met.

A payback of deferred taxes is required on land currently enrolled in the Rural Preserve program if the class 2a land associated with the property no longer qualifies for Green Acres; its classification changes to anything other than class 2b rural vacant land; is reclassified as non-homestead unless it was grandfathered in as a result of being enrolled in Green Acres for taxes payable in 2008; is no longer contiguous to Green Acres property under the same ownership; sold, traded, gifted, or transferred to a new owner who does not satisfy the ownership requirements of the program, including the failure to submit the required application and supporting documents within 30 days of sale closing; or becomes ineligible for the deferment because certain enrollment requirements of the program are not met.

Certain property transfers do not constitute a change in ownership and do not require the withdrawal of class 2a agricultural land from the Green Acres program as well as class 2b rural vacant land from the Rural Preserve program. The transfers that do not call for a payback of deferred taxes include:

the death of a property owner when a surviving owner retains an ownership interest;

the divorce of a married couple when one of the spouses retains an ownership interest;

the marriage of a single property owner when that owner retains an ownership interest in
whole or in part;

the organization into or the reorganization of a farm entity ownership under Minnesota Statute 500.24 when all owners maintain the same beneficial interest both before and after said organizational changes; and

the placement of a property into a trust, with the individual owners as grantors maintaining
the same beneficial interest both before and after the conveyance of a property into the trust.

The maximum payback on any class 2a agricultural land and class 2b rural vacant land enrolled in the Green Acres and Rural Preserve programs is three years of deferred taxes.

A three-year payback is required on all class 2a agricultural land and class 2b rural vacant land that is voluntarily withdrawn from the Green Acres and Rural Preserve programs at any time.

A property owner can enroll class 2b rural vacant land into the Rural Preserve program starting with the 2011 assessment. The transition of qualifying class 2b rural vacant land into this program by May 1, 2013 can be done without having to pay deferred taxes.

A property owner who chooses to do nothing with the 2b rural vacant land, previously grandfathered in Green Acres, will only receive a tax deferral on this land until the 2013 assessment. The assessor is required to remove all class 2b rural vacant land from the Green Acres program on January 2, 2013 and calculate a three-year payback on deferred taxes.

Land enrolled in non-perpetual preservation initiatives such as Reinvest in Minnesota (RIM), the Conservation Reserve Easement Program (CREP), the Conservation Reserve Program (CRP), or any other state of federal conservation program will continue to receive the tax deferral benefits provided that the Green Acres eligibility factors and criteria are met.